I submit this comment letter in response to the Commission's Proposing Release to mandate the electronic filing, and website posting by issuers with corporate websites, of beneficial ownership reports filed by officers, directors and principal security holders under Section 16(a) of the Securities Exchange Act of 1934 (the "Act"), generally as required by Section 403 of the Sarbanes-Oxley Act of 2002. I am Senior Corporate Counsel of Charles Schwab & Co., Inc., the primary operating subsidiary of The Charles Schwab Corporation, which is a publicly traded company subject to Section 16(a) of the Act and Section 403 of Sarbanes-Oxley.

As a publicly traded company in the financial services industry, we wholeheartedly support efforts that increase the availability of information to investors about the companies in which they invest. The SEC's efforts to facilitate rapid dissemination of financial and business information are commendable. My comments, therefore, focus on a few technical aspects of implementation in the current proposal.

1. Forms Filed by Parties Other than the Issuer

The proposed new paragraph (k) to Rule 16a-3 requires an issuer to post on its public website by the end of the business day after filing any form 3, 4, or 5 as to the equity securities of that issuer. Although an issuer typically arranges to file forms 3, 4, or 5 on behalf of its directors and executive officers, other entities - such as investment companies holding 10% or more of outstanding shares - generally file their own forms. Although third parties are required by Rule 16a-3(e) to "send or deliver" the statement not later than the time of filing to the issuer, nothing in the rule currently requires them to deliver electronically a statement suitable for posting to the issuer's public website. If the third party sends the statement by mail to the issuer, the issuer may not receive it until the deadline has passed for posting to its website under the current proposal.

The Commission suggests in the proposal that issuers may want to designate a manner of receiving statements electronically under Rule 16a-3(e).1 However, if the Commission is to require that any statement that is filed with respect to the issuer's securities be posted to its website, section 16a-3(e) should be modified to require persons (whose filings are not arranged on behalf of the issuer) to send the copy by electronic means to a contact designated by the issuer. Such a rule avoids the problem of delayed receipt, and it also avoids delay caused by the issuer having to convert a submission from paper to electronic format. If Rule 16a-3(e) were amended to require electronic notification, we would urge that it specify that a generally accepted electronic format be used (so that delays from conversion from one format to another be minimized).

Another way to handle the problem of posting statements filed by third parties is to modify proposed paragraph (k) to require posting of forms 3, 4, and 5 filed on behalf of directors and executive officers only. If this route were taken, the Commission may consider requiring cautionary language on the issuer's website that the postings are for directors and executive officers only, and that postings by other beneficial owners may be found in the Commission's EDGAR system (with instructions how to access EDGAR or a hyperlink to it).2 This approach makes information regarding directors and executive officers easily accessible to investors on the issuer's website, but also does not mislead investors into believing that those forms constitute the totality of all statements filed with respect to the equity securities of the issuer.

2. Hyperlink to Section 16 Forms

We support the Commission's proposal to satisfy proposed Rule 16a-3(k) with a hyperlink to Section 16 Forms to, for example, the Commission's EDGAR site. Such a hyperlink reduces duplicative efforts by the issuer (to file in EDGAR and then post a separate copy of the filing) and also minimizes the potential for discrepancies from having the dual posting requirement.

The Commission questioned in its proposal whether such a hyperlink should be to a group of forms or to each form individually. We urge that hyperlinks not be to each individual statement filed, because posting a separate hyperlink for each form poses the same risk pointed out our first comment; i.e., the issuer may be slow to receive and post hyperlinks to statements filed by third party beneficial owners. In addition, hyperlinking to each form eliminates the benefit from having a hyperlink at all: the list is not automatically updated with each filing, and the issuer must duplicate each separate filing with a hyperlink.

3. EDGAR Filing Deadlines

The Commission solicits comments in its proposed rules regarding whether an accepted Form 3, 4, or 5 filing should be treated in the same manner as a Rule 462(b) filing for purposes of the deemed filing date (i.e., the filing would be considered the same day if filed before 10:00 p.m. Eastern time). We support such an amendment to Rule 13(a)(3) of Regulation S-T to extend the filing deadline to 10:00 p.m. Eastern time. The rapid filing deadline and number of potential reports justify the extension from 5:30 to 10:00, and this extension would be particularly helpful to West coast issuers that already must complete their forms and transmit them by early afternoon to meet an East coast time deadline. Although the information on Section 16 forms is important to investors, the proposed extension of time from 5:30 to 10:00 is after market close, so there is minimal risk that extending the filing deadline by four and a half hours will cause serious harm.

I appreciate the opportunity to provide input on this important proposal and would be happy to discuss these comments with you further.

With respect to each Section 16 statement filed with the Commission, Sarbanes-Oxley Section 403 requires the issuer, if it maintains a corporate website, to provide "that statement" on its corporate website. Sarbanes-Oxley does not distinguish between filings arranged by the issuer and those filed by third parties, so it seems that there needs to be some means on the issuer's website to identify all Section 16 filings with respect to the equity securities of the issuer.